War on Wealth, Part II | Keeping Our Foot on the Gas

When Mr. Obama visited the padlock maker Master Lock in Milwaukee, on February 15, 2012, he drew the following conclusions. He said, “Manufacturing is coming back. Companies are starting to bring jobs back. The economy is getting stronger. The recovery is speeding up. We’re moving in the right direction. And now we have to do everything in our power to keep our foot on the gas.” So in keeping with my fact based approach, I have to ask, Are Mr. Obama’s claims reasonable? Let’s run down the list.

First of all, in my last post, War on Wealth | Obama Visits Master Lock, I pointed out that the United States has lost more than 6.0 million manufacturing jobs since 1990, and almost 1.0 million of those have been lost since Obama’s inauguration (see chart above). That’s hardly indicative of a manufacturing boom. And since Master Lock only brought back an alleged 100 jobs from China, that’s hardly proof of companies bringing jobs back. It would have been more accurate to state, although less of a reason to re-elect Mr. Obama, that one U.S. company brought back 100 jobs from China.

“The economy is getting stronger. The recovery is speeding up.”

Next, according to the Bureau of Economic Analysis, GDP declined at an annual rate of (3.5%) in 2009, increased at an annual rate of 3.0% in 2010, and then slowed to an annual rate of just 1.7% in 2011 (as of 1/27/2012). So since our economy declined from an annual growth rate of 3.0% in 2010, to an annual growth rate of just 1.7% in 2011, does this mean the economy is getting stronger? Not in my book. So instead of backing Obama’s claim, that the recovery is speeding up, the facts show that the recovery is actually slowing down (see chart above).

“We’re moving in the right direction.”

Are we moving in the right direction? Well, in terms of deficit spending, the government is borrowing at the highest rate of GDP since World War II, as shown in the chart (above). The national debt as a percentage of GDP has skyrocketed from 69.9% in 2008 to 104.8% in 2012, and is projected to reach 107.8% by 2014. The last time our debt-to-GDP ratio surpassed 100% was in 1945, when the federal debt climbed to 116.6% of GDP, peaking at 121.9% in 1946.

We know where the money was spent during the Second World War, but where’s the $5 trillion Obama borrowed and spent? For God’s sake, we could have cured cancer, or built a colony on the Moon with that kind of dough.

In terms of the near record debt-to-GDP ratio, coupled with the continuing loss of manufacturing jobs and the year-over-year decline in GDP, I conclude that the United States is moving in the wrong direction.

“And now we have to do everything in our power to keep our foot on the gas.”

Wait a minute; did Mr. Obama dare mention the word gasoline in his delusional tirade? When I first heard this, I wondered for a minute whether he really meant to say, ‘And now we have to do everything in our power to keep our boot on the neck of U.S. oil and gas producers.’

According to the U.S. Energy Information Administration (EIA), gasoline prices have risen from an average price of $1.61 in the week ending December 29, 2008, to $3.52 through the week ending February 13, 2012 (see chart above).

So since gasoline prices have risen by 118.6% under the Obama Administration, perhaps we should be doing everything in our power to remove the federal government’s dead cold foot from the gas pedal. Gasoline prices are expected to rise further, to $4.50 per gallon by this summer, which may give Mr. Obama a temporary victory in his War on Wealth, but fortunately for America, his chance of re-election will simultaneously run out of gas.

To the contrary, instead of being a time to continue recklessly forward, our foot glued to the accelerator, now is the time for America to pull over to the pits for refuelling, new tires, repairs, mechanical adjustments, and a driver change. The replacement of Mr. Obama with a truly Conservative POTUS is imminent. And just so you don’t get the wrong idea, no, I’m not suggesting as a substitute the severely moderate Mitt Romney. [But I’ll back Mr. Romney in a heartbeat over another four years of Obama.]